MONTEREY, Calif. — Embarking on what is being called an "exciting and groundbreaking step" to build credit union consortiums in community outreach, the president of a $50 million Modesto, Calif. CU has revealed plans for a new "mentored" branch jointly funded and managed by three large Bay Area CUs.
The novel "credit union within a credit union" project involves a July 1 opening of a low-income branch in E. Palo Alto by Community Trust Credit Union of Modesto and joined by Addison Avenue Federal Credit Union, Patelco Credit Union, San Francisco and Stanford Credit Union of Palo Alto.
The venture, which will have an E. Palo Alto nonprofit helping guide delivery of products and services to the large Latino community, was detailed here at a breakout session at the annual Big Valley Edu- cational Conference of the California/Nevada Credit Union Leagues.
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On hand to describe the venture, months in the works and an example of how small CUs "can lead the way" provided they have help from large brethren, was the president of Community Trust, Joe Duran, an ex-Pentecostal minister and leader in Modesto's Latino community.
"On our own the regulators would not have permitted us to set up the. East Palo Alto facility but with the help of larger credit unions, it can be done," said Duran, whose Modesto CU is designated by the U.S. Treasury as a community development financial institution eligible for grants to service the low-income.
Duran was joined on the league panel session entitled "Community Development: Reaching Out and Going Beyond" by Cliff Rosenthal, executive director of the Washington-based National Federation of Community Development Credit Unions and by John Leotti, president/CEO of Northern California Urban Development, a nonprofit based in E. Palo Alto.
"I have no intention of being a banker or a credit union president," said Leotti acknowledging, however, that his agency will retain an office in the branch to help oversee operations and serve as a "financial outreach arm." Like Duran, Leotti is a Pentecostal minister. In his comments, Rosenthal of NFCDCU lauded Duran, Community Trust and the three Bay Area CUs for charting new ground for small and medium size CUs to extend services to blighted and bankless areas like E. Palo Alto. Rosenthal said Duran is a man of "vision and faith" who is putting his CU principles to work, said Rosenthal. Up to now, noted Rosenthal, the most notable partnering arrangements among large and small CUs has centered in North Carolina where State Employees Credit Union of Raleigh led by CEO Jim Blaine, identified as another "visionary" on outreach, has provided help in the formation of a small Durham, N.C. Latino CU.
That linkup "has rightly received widespread national coverage", but the E. Palo Alto project is an example of a small CU taking the lead, he said.
Under the arrangement, Patelco, Addison and Stanford CUs will provide start-up funds, CD investments, processing backup, member education as well as loan participations.
Duran said the E. Palo Alto branch will provide much needed services to an underbanked community in such areas as mortgages, business loans and credit cards. –[email protected]
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